Traps when buying a used car
While the process of buying a used car is usually completed without legal advice, it is useful to refresh the checklist of the key points you should follow. This is particularly important if there is no intermediary, such as a used car dealership, overseeing the purchase.
There are some key points to reflect upon. Firstly, the person or entity registered on the Motor Vehicle Dealer Register is the one responsible for the vehicle, not necessarily the legal owner. This person or entity is entitled to possession however and must ensure the car is roadworthy. This Register does not record legal ownership.
Legal ownership is based on a sale and purchase agreement for the vehicle. If this document is not available, and it is quite common for either party not to have one, or it becomes misplaced, then there are search services available that trawl the relevant agencies to help establish a chain of ownership.
A logical place to start is to check whether any debt is secured against the vehicle. This query can be satisfied by searching the Personal Property Securities Register. If you complete the car purchase and have not ensured that any loan charge against the car has been cleared by the previous owner, then repossession of the car may still occur if the previous owner defaults on the loan secured against the car.
Regardless of the fact you have paid the purchase price for the car and registered yourself as the owner, the existing loan is a matter of public record and as such, puts you on notice that the debt secured against your new car purchase exists.
If this were to happen, you would still have legal rights against the seller, however it would be extremely inconvenient to be car-less and chasing funds from the seller who was less than honest with you in the first place.
The purchase of a used car is a common transaction and is often made in haste. However, follow the checklist and make sure to avoid the traps.